Over the past month, three companies have reported insider buys as their price hits or nears 52-week lows. Looking at insider buys while they’re trading at low prices can offer an excellent time to buy into a company or further your research on the company. Peter Lynch once offered that insiders will sell their shares in a company for many reasons, but they will only invest it if they think that the share price will rise.
The following three companies are trading at or within 5% of their 52-week low share price and reported insider buy(s) over the past 30 days.
Bob Evans Farms (BOBE)
There have been three insiders making buys into Bob Evans Farms this past week. These insiders come from the top rings of the company’s management and include CEO and COB Steven Davis as well as the Executive VP of Supply Chain Management Richard Hall and Director Charles Elson. These three buys come as the company’s price is nearing its 52-week low.
On Aug. 29, EVP Richard Hall added a minor 356 shares to his stake. The insider bought these shares at $43.73 per share for a total transaction amount of $15,568. Since this buy the price per share has dropped approximately -0.91%. Hall now holds on to at least 708 shares of the company’s stock.
The more sizeable buy came from Bob Evans’ CEO Steven Davis who added 15,000 shares to his holdings on Sept. 2. The CEO added these shares at $43.12 per share for a total transaction amount of $646,800. Since his buy the price per share has increased approximately 0.49%.
Most recently Director Charles Elson added 2,300 shares to his holdings in Bob Evans. The director bought these shares at $43.50 per share for a total transaction amount of $100,050. Since his buy the price per share has dropped approximately -0.39%. Elson now holds on to at least 4,623 shares of the company’s stock.
As can be seen on the chart above, these buys come as the price per share has dropped to near its 52-week low.
Bob Evans is a full-service restaurant company that operates Bob Evans Restaurants. It is also a producer and distributor of pork sausage product and complementary home-style refrigerated side dishes and frozen food items under the Bob Evans, Owens and Country Creek brand names.
Bob Evans Farms’ historical revenue and net income:
The analysis on Bob Evans reports that the company’s revenue per share has been in decline over the past five years, it has issued $327.053 million of debt over the past three years and its cash flow has severe divergence from reported net income. On the other hand, it also notes that the company’s operating margin is expanding, its dividend yield is near a 5-year high and its P/S ratio is near a 1-year high.
There are currently five gurus that hold a position in Bob Evans. Check out their holding histories here.
The company reported its first quarter fiscal 2015 results which highlighted:
- Net sales of $326.3 million, a decrease of $3.1 million from last year.
- The company’s $100 million repurchase authorization increased to $150 million.
- Company reaffirms fiscal 2015 diluted EPS range of $1.90 to $2.20
The Peter Lynch Chart suggests that the company is currently overvalued:
Bob Evans Farms has a market cap of $1.03 billion. Its shares are currently trading at around $43.81 with a P/E ratio of 46.90 and a P/S ratio of 0.85. The company’s dividend yield is at 2.83%, and it had an annual average earnings growth of 2.80% over the past ten years.
Fifth Street Senior Floating Rate Corp (FSFR, Financial)
Over the past month there have been three insiders making buys in Fifth Street Senior Floating Rate Corp. These buys come as the company’s price falls to its 52-week and all-time low. The insiders include CFO Richard Petrocelli, President and CIO Ivelin Dimitrov and CEO Leonard Tannenbaum.
Most recently on Aug. 25, CFO Petrocelli added 1,000 shares to his holdings. He added these shares at $12.44 per share. This transaction cost him a total of $12,440, and since his buy the price per share has dropped approximately -2.33%. The CFO now holds on to at least 2,000 shares of the company’s stock.
President and CIO Dimitrov also added 1,000 shares to his holdings, but on Aug. 20. He added these shares for $12.33 per share for a total transaction amount of $12,330. Since his buy, the price per share has dropped an additional -1.46%.
The largest buy came from the company’s CEO Leonard Tannenbaum who added a sizeable 225,437 shares to his holdings on Aug. 19. The CEO added these shares at $12.76 per share for a total transaction amount of $2,876,576. Since his buy the price per share has dropped about -4.78%. Tannenbaum now holds on to about 602,689 shares of the company’s stock.
Fifth Street Floating Rate operates as an externally managed, closed-end, non-diversified management investment company. It intends to be treated as a business development company. The company's investment objective is to maximize its portfolio's total return by generating current income from debt investments.
Fifth Street Floating Rate’s historical pricing:
The analysis on the company only reports one warning sign which is that the company’s sales outstanding has been increasing which indicates that the company might be having difficulty collecting payment from its customers.
No gurus hold a stake in Fifth Street Floating Rate.
Fifth Street Floating Rate Corp has a market cap of $81.001 million. Its shares are currently trading at around $12.15 with a P/B ratio of 0.80. The dividend yield of FSFR is currently at around 5.84%.
Herbalife (HLF)
The ever-controversial Herbalife has recently neared its 52-week low and some of the company’s insiders have swept in and added to their holdings in the company. Over the past month there have been four insiders adding to their holdings.
On Aug. 5, Executive VP of Worldwide Operations David Pezzullo added 7,000 shares to his holdings. Pezzullo added these shares at $49.34 per share for a total transaction amount of $345,380. Since his buy the price per share has increased approximately 0.95%. The EVP now holds on to a total of 57,515 shares of the company’s stock.
On Aug. 6, the Senior VP and Managing Director of China Jerry Li added 1,000 shares to his holdings for $49.70 per share. This transaction cost him $49,700, and since his buy the price per share has increased 0.22%.
On Aug. 7, General Counsel Mark Friedman bought a much smaller 200 shares of the company’s stock. He added these shares at $49.71 per share for a total transaction amount of $9,942. Since his buy the price per share has increased approximately 0.2%.
Most recently, on Aug. 12, Chief Legal Officer Brett Chapman bought 5,100 shares of the company’s stock at $52.00 per share. This transaction cost him a total of $265,200, and since his buy the price per share has dropped approximately -4.21%. Chapman now holds on to about 38,417 shares of the company’s stock.
Herbalife is a global nutrition company that sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products as well as personal care products. The Company distributes and sells its products through a network of independent distributors, using the direct selling channel.
Herbalife’s historical revenue and net income:
The analysis on Herbalife reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and that the company has a poor stock buyback record.
The Peter Lynch Chart suggests that the company is currently overvalued:
Herbalife has a market cap of $4.57 billion. Its shares ar ecurrently trading at around $49.81 with a P/E ratio of 11.10 and a P/S ratio of 1.00. The dividend yield of Herbalife stocks is 1.81% and the company had an annual average earnings growth of 18.60% over the past ten years.
GuruFocus rated Herbalife the business predictability rank of 3.5-star.
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